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Informilo Magazine for Sibos 2013

Informilo Magazine for Sibos 2013

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02/26/2014

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Many banks are trying to transform them-selves for the digital age but few have goneas far as Poland’s BRE Bank, which re-booted earlier this year by scrapping itstraditional brand and redesigning itself from scratch.
BRE, which launched in Poland in the1980s and later became a strategic invest-ment of Commerzbank, rst tested Internetservices by launching mBank, a pure-playonline bank in 2000. As an Internet-onlybank, mBank rose rapidly to become Po-land’s biggest online bank and its third larg-est retail bank and then expanded into theCzech Republic and Slovakia.Today mBank is so successful that BRE,the parent company, has decided to changeits name to that of its Internet subsidiary.The commercial bank and its two retailbrands will soon be using the name mBank.The “m” signies not only that the bank hasincorporated mobile but that it has under-gone a true metamorphosis.“It took courage to rebuild the bank,” saysMichal Panowicz, who spent three years atHarvard Business School and ve years atMicrosoft in the U.S. before becoming man-aging director of the mBank project. Pano-wicz was brought on board to spearheadthe radical transformation because BREBank determined that Big Data analytics,social networking and mobile are not justnice-to-have add-ons — these technologiesneed to permeate everything it does.Change is necessary because interoper-ability and hyperconnectivity are allowing customers to switch providers easily. Peer-to-peer services and social network referralsand critiques are changing how relation-ships and trust are built. What’s more, thereis a shift from a high-value low-frequency-based revenue model to one based on verylow value but extremely high frequency,with micro-fees providing recurring rev-enue, undercutting the traditional banking margins and fees. Options for banks includeunbundling the current model and excel-ling in one specic area, transforming intolong-tail business model organizations orpartnering with newcomers in the business.“Our industry is being challenged by ag-gressive newcomers who are experimenting with creative strategies and dramaticallydifferent business models,” says Peter Van-der Auwera, co-founder of Innotribe, theinnovation arm of SWIFT, the financialservices organization that each day han-dles wire transfers for over 10,000 banks. Vander Auwera is also the architect andcontent curator of Innotribe at Sibos, anannual banking conference which is organ-ized by SWIFT and takes place this year inDubai on September 16th-19th. “The focusof the Innotribe sessions at Sibos 2013 willbe on preparing banks for a very differentkind of future, one which will be centeredaround big data analytics, mobile, and socialand which will require new tools, capabili-ties, and non-linear ways of thinking,” says Vander Auwera.The new mBank online service, whichwas opened to customers in June of this yearand won FinovateEurope’s Best of Show,gives a glimpse of what’s to come. mBankoffers a state-of-the-art interactive userinterface; a search engine that allows bothcommercial and retail customers to viewtheir real-time transaction history as easilyas using Google to look up something onthe Internet; money transfers using phonenumbers or social network connections in-stead of account numbers; personal nancemanagement services which clearly explainwhen money was spent and on what andforecasts overall spending by the end of themonth; video banking — an online, securevideo stream connection to bank advisors toauthenticate contracts and transactions; andgamication to encourage smart spending and saving. Within three months the newservices have attracted over a million cus-tomers and accolades from banking industryobservers. mBank is “the rst bank-inventedmobile social solution I’ve seen that evencomes close to delivering the new retailbank reality,” banking industry expert ChrisSkinner, a scheduled speaker at Sibos, saidin a blog posting.Skinner, the author of a book scheduledto be released at Sibos called Becoming aDigital Bank — Strategies for Success, con-siders that and other developments as anencouraging sign.“I am pleased to say that in 2013 bankshave woken up to the 21st century chal-lenges of banking,” he said in an interviewwith Informilo.The Polish bank took action because “the‘barbarians’ are at the gate,” says Panowicz,referring to start-ups offering innovative,cheaper, more efcient ways to move, man-age and exchange money. “The last thing 
SEE INSIDE:TOP 25 HOTTESTGLOBAL FINANCIALSERVICES START-UPS
 BY
JENNIFER L. SCHENKER
INDEPENDENT PRINT MAGAZINE DISTRIBUTEDAT SIBOS IN DUBAI SEPTEMBER 16-19, 2013 ANDAT LEVEL39 IN LONDON AUTUMN 2013WWW.INFORMILO.COM
THE HYPERCONNECTED ECONOMY:
HOW TECHNOLOGY WILL RADICALLYTRANSFORM BANKS AND THE FUTURE OF MONEY
REBOOTING BANKING FOR THE 21ST CENTURY
CONTINUED ON PAGE 22-23
 
WHERE BUSINESSMEETS INNOVATION
02
INFORMILO.COM16-19
|
SEPTEMBER
|
2013
CONTENTS
 
JENNIFER L. SCHENKER:
EDITOR-IN-CHIEF
 AUDREY MANDELA:
CONTRIBUTING EDITOR
 
CONTRIBUTING WRITERS:
JAMES SILVER,ERIC SYLVERS, D’ARCY DORAN
DESIGN:
THEDESIGNSURGERY.CO.UK 
THIS MAGAZINE WAS PRODUCED BY INFORMILO, A MEDIA COMPANY THAT SPECIALIZES IN CONNECTINGBUSINESS WITH INNOVATION. INFORMILO RUNS A NEWS SITE, WWW.INFORMILO.COM, AND PUBLISHESINDEPENDENT MAGAZINES CONNECTED TO MAJORINDUSTRY CONFERENCES.
22

23
REBOOTINGBANKINGFORTHE21STCENTURY
02
DIGITALINTERLOPERS
03
CANDESIGNTHINKINGTRANSFORMBANKS?
04

05
BANKSAREPARTNERINGWITHNIMBLERRIVALS
06

07
ONLINELENDERSANDBANKSBECOMEPEERS
08

09
PREVENTINGTHENEXTFINANCIALMELTDOWN
10

11
 ACCELERATINGFINTECHSTART-UPS
12

13
TOP25GLOBALFINANCIALSERVICESSTART-UPS
14
GOINGMOBILE
15
CHRISLARSEN:SERIALDISRUPTER 
16

17
UDAYGOYAL’SVISIONOFTHEFUTUREOFBANKING
18
THEHAPPINESSECONOMY 
19
RECREATINGCAPITALISM
20

21
HAYDNSHAUGHNESSYONINNOVATIONMODELS
01
THE INFORMATION CONTAINED IN THIS PUBLICATION WASCOMPILED USING ETHICAL JOURNALISM PROCEDURES.NO LEGAL LIABILITY CAN BE ACCEPTED FOR ANY ERRORS.NO PART OF THIS PUBLICATION MAY BE REPRODUCEDWITHOUT THE PRIOR CONSENT OF INFORMILO.
EMAIL
SALES@INFORMILO.COM
WEBSITE
WWW.INFORMILO.COM
ADVERTISE IN INFORMILO
UPCOMING:DLD TEL AVIV
 15-16 OCTOBER
DUBLIN WEB SUMMIT
30-31 OCTOBER
While many retail banks are still tryingto layer basic digital services on topof clunky legacy systems Moven hasmoved into the market. The digital-only bank is attracting young customers by using mobile phones as primary pay-ment devices, replacing credit cards,debit cards and cash; offering its cus-tomers an innovative way of trackingtheir spending by categorizing transac-tions and creating a purchasing behav-ior prole that allows for adjustments;and granting its customers the ability toimprove their nancial health by bring-ing in friends from social networks.There is also a Weight Watchers-likesystem of rewards and bonuses for goodnancial behavior.
Given its global ambitions and its ini-tial target customer base — the over 80million millennials in the U.S. who areexpected to become a driving force inthe economy within ve years — it is notsurprising that Moven, which launcheda beta product into the market in April of this year, was able to raise an additionalround of venture capital last month. (InAugust 2012, Moven announced $2.41million in seed round funding from An-themis Group and Raptor Ventures.)The new investor is Life.SREDA, aventure fund owned by a group of eightRussian commercial banks, marking therst time that any of the digital-only neo-banks have raised money from a tradi-tional bank.It is unlikely to be the last. “I woulddenitely expect more traditional bankslooking to make digital investments,”says serial entrepreneur Scott Bales,Next Bank’s Singapore-based directorof user strategy innovation and a Movenboard member. “Many of the traditionalbanks are already very aware of the be-havioral shift driven by digital. So I’d ex-pect them to make strategic investments,if not acquisitions, in the digital space.”(See the story about banks partnering with payment and foreign exchangestart-ups on pages 4 and 5.)While digital interlopers like Movenwere at first ignored or greeted withskepticism by traditional banks, this is nolonger the case. Some banks have alreadystarted copying their best-of-breed ser-vices. BNP Paribas, for example, recentlylaunched a standalone digital mobilebank, Hello Bank!, in Belgium, Germanyand France, with plans to open in Italyin October, to counter competition fromdigital-only banks.Billed as a ‘native mobile bank,’ HelloBank! accounts can be opened in just foursteps from an Android or Apple smart-phone or tablet or over the Internet. Thedigital-rst approach is backed by a teamof staff working extended hours six daysa week to answer queries via chat, email,tweet and phone. Hello Bank! users alsohave access to BNP Paribas’s extendedbranch network and online brokeragevia Cortal Consors in Germany. BNPParibas has said it hopes to attract 1.4million customers for the service overthe next ve years.Ease of use, an engaged customer base,differentiated distribution (no branches)and strong digital (mobile and Web)support are all the rage, but it is a newapproach to the basic day-to-day bankaccount that is resonating with digitalnatives, Brett King, Moven’s founder andCEO, explains in a blog post.Among the neo-banks only Germa-ny’s Fidor Bank has a banking license.Others like Simple and Finland’s Holvirely on the back offices of traditionalbanks. Although they are proving at-tractive to digital natives the neo-banksremain niche players. Some may end uplicensing what they do best to traditionalbanks, says Uday Goyal, a co-founderat Anthemis Group, an investment andconsulting group specializing in 21st-century nancial services. Anthemis isan investor in Simple, Moven and FidorBank and recently revealed that it hasraised an undisclosed amount of invest-ment from Life.SREDA.But not all neo-banks are ready tocontent themselves with just a slice of the market. “I think in the short termdigital-only banks will start with suc-cess in one product vertical, but quicklydiversify to other verticals as they scale, just like Amazon did, starting in books,and spreading to all online retail,” saysBales, who is also a scheduled speaker atSibos. “Right now there are key engage-ment verticals in which the neo-banksare nding success, and in time that suc-cess is only going to grow, fast.”
Digital Interlopers
 BY
JENNIFER L. SCHENKER
 
 
THE HYPERCONNECTED ECONOMY:
HOW TECHNOLOGY WILL RADICALLY TRANSFORM BANKS AND THE FUTURE OF MONEY 
03
16-19
|
SEPTEMBER
|
2013INFORMILO.COM
Vince Voron, a scheduled speaker atSibos in Dubai, has more than 20 yearsof design experience at two of theworld’s most iconic brands: Apple andCoca-Cola. He recently took on a job asVice President of Dolby Labs, leading amarketing team which includes design,brand management, digital/experientialmarketing, content, production and theDolby Theater. Voron has an engineer-ing degree from Pennsylvania State, anMBA from San Jose State and a humanecology degree from the University of Paris. While at Apple he lived in Cali-fornia, Singapore, Ireland and Franceand was the senior industrial designmanager up until 2006. He then joinedCoca-Cola as head of design, a positionhe held until earlier this year. Voronrecently spoke to Informilo Editor-in-Chief Jennifer L. Schenker about how design thinking can transform any busi-ness — including banks.
Traditional banks are beingtold they need to be more like Apple. On a practical level how canbureaucratic, staid organizationslike traditional banks make such aleap? What specifcally can they learn rom Apple?
It is not really how can a bank belike Apple but how can companieslarge and small learn from any myriad of industries and how the role of the creativedesigner should change: how she or hecan inspire other folks in the organiza-tion. One of the things we did at Apple iswe actually spent time working with ourdesigners and building cross-functionalcapabilities. We taught designers aboutnance and actually sent the designersout of the design studio into the organi-zation. We had to prove that we couldbe accountable and we understood hownancial decisions were made in orderto show the company how they got valuefrom design.We brought the leaders, the directorsinto the design studio. It was an interest-ing experience observing nance leaderscoming into the design studio and uncom-fortably mixing with colleagues that notonly dressed differently but were operat-ing effectively in an environment of loudmusic and dynamic surroundings. It wasequally enlightening to observe seniordesign leaders maneuvering awkwardlyin the boardroom. This has been a keyto Apple’s success and it was something that when I moved over to Coke I tookvery seriously.At Coca-Cola, over a period of sevenyears, the design team came to be viewedas business drivers. We talked to peopleabout the value of art and beauty and itsability to increase customer allure andmake the product more efcient. We wereable to build these metrics into the deci-sion process and convince an unlikelygroup of individuals to work together andbehave in a very different way.
How do you plan to apply design thinking at Dolby?
One of the reasons I came to Dolbyis that it is something so differentfrom Apple and Coca-Cola. Dolby is anengineering-driven company with aglobal brand; an ingredient brand. We arebeginning to use design thinking at Dolby,a type of pinball strategy. It is really abouttaking an idea, bouncing it to a partnerand having them bounce it to someoneelse. As the idea bounces like a pinball itis growing and has the ability to scale. Itis called open innovation. This can bereally valuable for an organization but itis scary for the banking industry or anyindustry because playing pinball risksexposure to new ideas.
Design thinking is a term thatis in vogue now. But whatexactly does a bank have toincorporate into its business model,its strategy and its managementteam to truly embrace it?
Until recently there had not beenmuch academic research relative todesign but an academic dialogue has beenopened up with businesses at Stanford andother prominent business schools so todaytop-notch MBA students take design think-ing classes that will include collaborativeprototyping and idea generation. The ideais that everyone is a designer — it is notabout having a degree in design — it is anapproach to problem solving and how youintegrate brand, products and services. Aslarge nancial institutions begin hiring these young MBAs this thinking will startto be incorporated.
I you were hired by any o thebig traditional bankstomorrow what is the frst thing you would do?
Cut my hair. No, I probably wouldn’tdo that. One of the rst things I didat Coke when I was hired was to help leadone of the largest R&D innovation projects,helping Coca-Cola Freestyle transformsoda fountains in restaurants globally andmake this new brand alluring to teens. Oneof the key things I did was to go around thecompany and asked all the executives whatwas the most memorable experience theyhad with Coke when they were a teenager.They spoke about the Coke Machine — thebuttons, the lights — and I realized thatinteraction with a particular machine wastheir rst retail experience with Coke —the rst time they were spending their 50cents without their parents. I took thatback and we spent signicantly more thanwe planned on the design overlay.If I were going about this for the bank-ing industry I would start by asking whatis my big task: to redefine how certaintypes of data are collected and used, howteams are built, how consumers are en-gaged? I would sit down with the top lead-ers and ask them targeted questions abouttheir experience — as a consumer or as anemployee — and then try to pull from theman unanticipated solution and take thatback to them to show them that they hadthe answer — they just didn’t realize it.When designers are empowered to gobeyond traditional boundaries a lot of amazing things can happen.
What is your adviceto bankers?
One of first things I would chal-lenge them to do is to emulate myexperience at Apple and Coke and reachout into other parts of the organizationto really learn about what drives themand makes them successful. If you lookat polar opposites within an organizationand take the time to understand what theydo you can identify an underlying threadthat will help them both achieve theirgoals. One other thing which is really,really important is to try to make otherindividuals successful on your agenda.It is something that has taken me about25 years to gure out. Check your ownego — forget about getting credit — takeyour idea on to the organization and bring your dream to life.
Q AQ AQ AQ AQ A
How DesignThinking CouldTransform Banking
An Interview With Vince Voron

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